John MacDonald: Is compulsory health insurance the answer?

So the guy running the hospital system says it could go broke within just a few months and we’re going to just keep on doing things the way we have forever, are we? 

That would be nuts. Which is why I think we’d be much better off if we just required people to have health insurance. 

The public system which Dr Lester Levy —who is the Commissioner appointed by the Government to run Health NZ instead of the Board— says its spending $1.4 billion more than it should. 

His job is to get on top of that and get the place running as the Government wants it to be running by Christmas. Which is a pipedream, especially if anyone thinks that amount of money can be saved, services can be maintained —if not improved— and that we can do it under the current funding model. 

Which is where Singapore comes into the conversation, and where I think we should be looking for a solution for this health funding mess. Because what other solutions are there? I can’t think of any. You might, but I can’t. 

Former politician Richard Prebble has written an interesting piece in the NZ Herald today, where he says that maybe Singapore has the best approach when it comes to paying for healthcare. 

Over there, everyone pretty much pays universal health insurance. They have a scheme which is mandatory for all citizens and permanent residents which provides cover for life, for hospital bills and outpatient treatments. 

As well as that, they have a compulsory medical savings scheme which people can use on other healthcare expenses for their families. 

So think KiwiSaver, but it’s a health fund instead of a retirement fund, that comes out of your wage or your salary and you can call on it when you need it. And just like KiwiSaver, employers are required to top it up, as well. 

And what this approach means is that the Government in Singapore doesn’t have to spend as much of its budget on the health system, unlike us here in New Zealand, where health is the biggest single item in the Government’s annual budget. 

Percentage-wise: in Singapore, the Government or taxpayers cover just a quarter of healthcare costs. The rest are covered through these insurance schemes they have operating over there. 

In New Zealand, it’s around 85 percent. 

In his NZ Herald article today, Richard Prebble reckons politicians here wouldn’t have the guts to push for the same thing here. But I say, why not? 

Unless you can come up with a better solution, I think compulsory health insurance is the only solution. 

The only solution if we don’t want to keep hearing the talk we’ve been hearing from the Health NZ Commissioner in the past 24 hours. 

Talk like this from Dr Levy: ““For us, this is not a marathon, it’s a sprint. We have to move really quickly to secure our financial position as quickly as possible in order to overcome this particular cash-flow issue that is hanging over us.” 

And he’s got the job of sorting this out before Christmas. Which, in dollar terms, means somehow cutting spending by tens of millions of dollars per month. 

How on earth do you do that without cutting services and making people wait longer for treatment? 

The answer to that, is you can’t. It’s impossible. 

Which is why I’m saying that, if the model is broken —as it very clearly is— then we need to do things differently. And, for me, compulsory medical insurance is the answer. It could be done through existing medical insurance outfits - or it could be a government-run scheme like they have in Singapore. 

But, either way, we have to get over this idea of doing things the way we’ve always done them if we are reall

Episode Transcript

Speaker 1 (00:06):
You're listening to the Canterbury Morning's Podcast with John McDonald
from Newstalk ZB.

Speaker 2 (00:12):
So the guy running the hospital system right, a guy
in charge of the hospital system says it could go
broke within just a few months, and we're going to
keep on doing things the way we have forever? Are we?
That'd be nuts, wouldn't it, Which is why I think
we would be much better off if we just required
people to have health insurance now by doing things the

(00:36):
way we have forever. What do I mean? I mean
that the government or the taxpayer paying for pretty much
everything unless you do have health insurance, which gets you
into a private hospital somewhere generally much sooner than if
you had to go through the public system. The public
system which doctor Lester Levy, who was the commissioner appointed

(00:57):
by the government to run Health New Zealand instead of
the board, the public system that he says, is spending
one point four billion dollars more than it should and
his job is to get on top of that and
to get the place running as the government wants it
to be by Christmas, which is a pipe train. Especially

(01:18):
if anyone thinks that amount of money can be saved,
services can be maintained, if not improved, and that we
can do it under the current funding model and dreaming,
which is where Singapore comes into the conversation and where
I think we should be looking for a solution for
this health funding mess, because what other solutions are there?

(01:40):
I mean, I can't think of any. You might but
I can't. And former politician Richard Prebble, he's written an
interesting piece in the New Zealand Herald today where he
says that maybe Singapore has the best approach when it
comes to paying for healthcare. So over there, everyone pretty
much pays universal health insurance, and we've got a scheme

(02:03):
which is mandatory for all citizens and permanent residents, which
provides cover for life, cover for life for hospital bills
and outpatient treatments. And as well as that, they've got
a compulsory medical savings scheme which people can use on
other health care expenses for their family. So think KEII saver,

(02:24):
but this is a health fund instead of a retirement
fund that comes out of your way your salary and
you can call on it when you need it, and
just like KYI Saver, employers are required to top it
up as well. And what this approach means is that
the government in Singapore doesn't have to spend as much
of its budget on the health system, unlike us here
in New Zealand, where health is the biggest single item

(02:47):
in the government's annual budget. Here's some percentages for you,
percentage wise, just as a comparison. In Singapore, the government
or taxpayers cover just a quarter of healthcare costs. The
rest are covered through these insurance schemes they have operating
over there. In New Zealand, it's around eighty five percent.

(03:08):
So twenty five percent of health care in Singapore paid
for by the government, about eighty five percent here in
New Zealand. Now, in his New Zealand Herald article today,
Richard Prebble reckons politicians here wouldn't have the guts to
push for the same thing in New Zealand. He doesn't
say it as crudely as that, but that's what he thinks.
But I say, why not, Why not unless you can

(03:32):
come up with a better solution. And look, I'm all
he is, bring it on, But unless you've got a
better idea, I think compulsory health insurance is the only solution,
the only solution if we don't want to keep on
hearing the talk we've been hearing from the Health New
Zealand Commissioner in the past twenty four hours, talk like this.
Here's a quote for you from doctor Lester Levy. He says,

(03:54):
for us, this is not a marathon, it's a sprint.
We have to move really quickly to secure our financial
position as quickly as possible in order to overcome this
particular cash flow issue that is hanging over us. End
of quote. And like I said before, he's got the
job of sorting this out before Christmas, which in dollar
terms been somehow cutting spending by tens of millions of

(04:16):
dollars per month. How on earth do you do that
without cutting services and without making people wat log for
treatment or The answer to that is you can't. It's impossible,
which is why I'm saying today that if the model
is broken, as it is very clearly is broken, then
we need to do things differently, and for me, compulsory

(04:37):
medical insurance is the answer. It could be done through
existing medical insurance outfits, or it could be a government
run scheme like they have in Singapore, but either way
we have to get over It's time for us to
get over this idea of doing things the way we've
always done them.

Speaker 1 (04:54):
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